A Primer on Exporting to Belize by chenboying


									A Primer on Exporting to Belize

            Christina D. Storz
            Research Assistant
 Food and Resource Economics Department
           University of Florida
           Gainesville, Florida

            Timothy G. Taylor
 Food and Resource Economics Department
           University of Florida
           Gainesville, Florida

            Gary F. Fairchild
 Food and Resource Economics Department
           University of Florida
           Gainesville, Florida

               June, 2004

Every year the U.S. Department of State publishes extensive Country Commercial Guides for a
large number of countries. These guides provide a great deal of information useful to individuals
interested in developing exports markets either through direct exports or through direct foreign
investment. This paper provides an abridged version of the Country Commercial Guide for
Belize as well as supplemental information of direct relevance to agribusiness firms. It is hoped
that the information provided provides a useful starting point for individuals interested in
exploring export or investment opportunities in Belize.

Keywords: Belize, agribusiness, export guide, trade, foreign investment.

                             A Beginner’s Guide to Exporting to Belize

Every year the U.S. Department of State publishes extensive Country Commercial Guides for a
large number of countries.1 These guides provide a great deal of information useful to
individuals interested in developing exports markets either through direct exports or through
direct foreign investment. This paper provides an abridged version of the Country Commercial
Guide for Belize as well as supplemental information of direct relevance to agribusiness firms It
is hoped that the information provided provides a useful starting point for individuals interested
in exploring export or investment opportunities in Belize.

                                   Economic and Political Overview

Belize is the second smallest and least populated country in Central America. It has an open,
private sector-led economy based mainly on export agriculture and services. Though Belize is
the smallest consumer market in the region, it has unique advantages as a potential trading
partner, such as proximity to the United States, efficient air and sea transportation, and strong
cultural influences from North America. The Belize dollar is pegged to the U.S. dollar at the rate
of two Belize dollars to one U.S. dollar and English is the official language.

The People’s United Party administration plans to continue a mixed monetary and fiscal policy,
which entails lowering the lending rates and liquidity and reserve requirements, as well as
borrowing heavily to boosting public sector spending on infrastructure. Selected public
enterprises were privatized and the receipts reinvested into high-quality, export-oriented
infrastructure and the building of human resource capacity.            Agricultural economic
diversification and expansion of the tourism industry continue to be two of the Government of
Belize’s main economic strategies towards increased foreign exchange earnings and import

Due to the current administrations “growth economics” policy, the GDP growth rate of 1.7
percent in 1998 was stimulated to 6.4 percent in 1999 and 8.2 percent in 2000. However, the
economy contracted in 2001 due to extreme weather events and terrorism attacks in the U.S.
Belize’s GDP of $805 million in 2001, up from $773 in 2000, yields a per capita income of about
$3,134, which is higher than most other Central American countries. This growth is attributed
primarily to increases in total output of Belize’s primary agricultural crops not severely affected
by tropical storms- citrus, grain, and livestock sub-sectors, as well as the fast-growing tourism
industry. Economic growth in 2002 is projected to be in the range of 3 to 4 percent.

The primary sector of the economy, agriculture contributed 11.3 percent to the total GDP in
2000. After growing for three consecutive years, Belize’s three major agricultural products,
sugar, citrus concentrate, and bananas, declined in 2001. Likewise, export earnings from marine
 “County Commercial Guides are available for U.S. exporters from the National Trade Date Bank’s CD-ROM or
via the Internet. Please contact Stat-USA at 1-800-STAT-USA for more information. Country Commercial Guides
can be accessed via the World Wide Web at: http://www.stat-usa.gov, http://www.state.gov/, and
http://www.mac.doc.gov. They can also be ordered in hard copy or on diskette from the National Technical
Information Service (NTIS) at 1-800-553-NTIS. U.S. exporters seeking general export information/assistance and
country-specific commercial information should contact the U.S. Department of Commerce, Trade Information
Center by phone at 1-800-USA-TRADE or by fax at (202) 482-4473” (U.S Department of State, 2001, p. 2).

products declined in 2001 after three consecutive years of growth. The growing move toward
freer trade may erode some of the preferential trade market arrangements Belize enjoys. Thus,
the future of Belize’s agricultural sector could be quite turbulent unless it finds ways to become
more efficient. Revenues from tourism have become increasingly important and have been on a
growth trend.

Foreign investors are required to register any investment with the Central Bank of Belize to
facilitate the repatriation of profits and dividends. However, foreign investors in Belize are
having difficulty repatriating their profits due to a tight supply of U.S. dollars in the local
banking system. The Government of Belize’s preferred areas in which investors are encouraged
to invest include agro-industries, tourism, light manufacturing, and forestry-based industries.
The U.S. continues to be Belize’s number one trading partner. In 2001, the U.S. imported 53.8
percent of Belize’s total exports and supplied 48.1 percent of all Belizean imports.

                            Marketing U.S. Products and Services

There are a number of factors that should be considered in exporting products to Belize. This
section provides a brief overview of many critical factors that must be considered.

Distribution and Sales Channels
Because the local economy is extremely small, the best way for American exporters to penetrate
the Belizean market is to seek a local importer/wholesaler who would generally act as their
agent/distributor in Belize. A typical distribution channel for an American-made product
involves the U.S. manufacturer or distributor, the local importer or wholesaler (who almost
always acts also as the distributor), the retailer, and finally the buyer/consumer.

Finding a Partner
Consistent with U.S. Department of Commerce guidelines, the Economic and Commercial
section of the U.S. Embassy in Belize can assist interested American companies in finding agents
and distributors in the country through the International Partner Search (IPS) service. The
embassy also provides the Gold Key Service (GKS), another business facilitation program that
includes, among several other personalized services, introductions to potential partners. The
embassy can also supply lists of the major local firms in a particular industry to interested
American firms upon request. Nominal fees are charged for these services on a cost-recovery
basis. Interested American companies should contact the U.S. Embassy in Belize or the nearest
U.S. Commerce Department Export Assistance Center for detailed information.

Although many Belizeans are familiar with most popular U.S. brand names, franchising remains
rare, since competition in the local market is more often based on price than name recognition or
perceived quality standards. Franchising in Belize currently extends to just a few well-known
brand names, including Best Western in the hospitality industry, Coca-Cola and Pepsi in the soft
drink industry, and Avis, Budget, Hertz and National in the auto rental business.

Direct Marketing
Direct marketing in Belize by U.S. companies is rare. Normally, a local representative of the
American firm performs all the local marketing functions.

Joint Ventures
The government welcomes foreign capital in the domestic economy and supports joint venture
and partnership investments whenever possible as the preferred mechanism for the employment
of such capital.

Steps to Establish an Office
The following is taken from the laws of Belize, Chapter 206, Part IX. It applies to foreign
companies wishing to establish an office in Belize.

   •   Overseas companies which establish a place of business within Belize shall, within one
       month of the establishment of the place of business, deliver the following to the Registrar
       for registration:
           A certified copy of the charter, statutes or memorandum and articles of the company
           or other instrument constituting or defining the constitution of the company, and if the
           instrument is not written in the English language, a certified translation thereof;
           A list of the directors and secretary of the company containing the particulars:
           • In the case of an individual, his present Christian name and surname and any
               former Christian name and surname, his usual residential address, his nationality
               and his business occupation;
           • In the case of a corporation, its corporate name and registered or principal office;
           • With respect to the secretary, or, where there are joint secretaries, with respect to
               each of them, his present Christian name and surname, any former Christian name
               and surname and his usual residential address.
           The names and addresses of someone or more persons resident in Belize authorized to
           accept on behalf of the company service of process and any notices required to be
           served on the company.
   •   Every overseas company shall, in every calendar year, file with the Registrar such a
       statement in the form of a balance sheet as would, if it were a company incorporated in
       Belize and having a share capital, be required to be included in the annual summary.
   •   Every overseas company shall do the following:
           In every prospectus inviting subscriptions for its shares or debentures in Belize, state
           the country in which the company is incorporated;
           Conspicuously exhibit on every place where it carries on business in Belize the name
           of the company and the country in which the company is incorporated;
           Cause the name of the company and of the country in which it is incorporated to be
           stated in legible characters in all bill heads and letter paper, and in all notices and
           other official publications of the company; and
           If the liability of the members of the company is limited, cause notice of that fact to
           be stated in legible characters in every such prospectus as aforesaid and in all bill
           heads, letter paper, notices and other official publications of the company in Belize,
           and to be affixed on every place where it carries on business.

In addition, foreign companies are required to pay a registration fee of BZ$84 (US$42) at the
office of the Registrar General in the Supreme Court Building in Belize City.

Selling Factors
Most major importers and wholesalers employ local commission agents who sell and deliver the
product to the retailer. Most major supermarkets also deliver the product to the doorsteps of the
customer. Personal contact with the clientele, therefore, is always recommended.

Advertising and Trade Promotion
Advertising in Belize is done mainly through radio, newspapers, magazines, and television.
However, the use of billboards is fast gaining popularity. The Economic and Commercial
Section of the U.S. Embassy in Belize puts out a quarterly newsletter titled “Commercial
Opportunities.” American companies are welcome to place advertisements in this publication
free of charge. The U.S. Embassy also participates in two national trade events: the National
Agriculture and Trade Show, normally held in May, and EXPO Belize, held in September as part
of the country’s independence day celebration. American firms are also welcome to join the U.S.
Embassy’s pavilion at these two trade shows.

Product Pricing
Certain items, including basic foodstuffs (rice, beans, sugar, bread and flour), butane gas, and
fuel, have government price controls (1987 supplies control regulations). Most items are subject
to one of two sales tax rates: 12 percent on petroleum products, alcohol and tobacco, and 8
percent on all other commodities. Staple food items such as rice, beans, corn, fresh meat, flour,
sugar, eggs, bread and tortilla are sales tax exempted.

Sales Service/Customer Support
Sales service in Belize is limited to business establishments dealing with electronic equipment,
including photocopiers, typewriters, computers, and air conditioners.

Selling to the Government
Suppliers of U.S. products and services generally have little difficulty selling to the Government
of Belize. In many cases, however, success of the suppliers in selling to the government depends
on their political affiliation or personal contacts with the governing party. Local suppliers who
are not members of the party of the day may not have the opportunity to sell to the government,
and whenever they do, they may experience late payments. Numerous opportunities exist for
selling to local projects that are funded by multilateral financial institutions, such as the Inter-
American Development Bank.

In addition, the general orders, a list of government rules and regulations pertaining to the
administration of the public service, govern the contractual and purchasing practices of
government department and agencies. Under this order, government purchases of over $50,000
must be submitted for public bidding by both local and foreign companies. However, bidders for
tenders for externally funded projects must comply with the procurement rules and regulations of
the foreign funding organization.

Protecting your Product from IPR Infringement
In May 2000, the Belize national assembly passed a comprehensive set of Intellectual Property
Rights (IPR) legislation as part of Belize’s obligation under the World Trade Organization to
implement the agreement on Trade-Related Aspects of Intellectual Property (TRIPS agreement).

Need for a Local Attorney
It is advisable to seek legal assistance when planning to do business in Belize. The U.S. Embassy
can provide a comprehensive list of the major law firms in Belize on request, as well as a list of
local certified public accountants, but cannot recommend specific practitioners.

                               Agribusiness Industry Prospects

In 2000, Belize imported $221.7 million worth of goods from the United States. Of this total,
95.8 percent was comprised of machinery and transport equipment ($87.4 million), manufactured
goods ($71 million), food and live animals ($30.5 million), and chemicals and related products
(23.5 million).

Belize has very limited local manufacturing capability, so the best prospects for U.S. agricultural
exports to Belize include food processing and packaging equipment. Agro-processing is one of
the top priorities of the GOB for economic development. Local demand in this industry is
increasing because of local and foreign investment in agribusiness ventures.

                               Trade Regulations and Standards

Trade Barriers
The Government of Belize implemented the final phase of CARICOM’s common external tariff
in April 2000, which brought Belize’s import duties on industrial products to an average of 20
percent. There is also a variable revenue replacement duty ranging from 12 to 25 percent for
non-essential goods, such as beer, cigarettes, and liquor.

The following areas typically closed to foreign private investors are merchandising (distributive
trades), sugar cane cultivation, commercial fishing (inside the barrier reef), internal
transportation, and restaurants and bars.

Customs Regulations
The Belize Customs Department generally uses original commercial invoices and product
catalogs to determine the value of goods coming into the country. However, there are occasional
reports of harassment, pilferage, and requests for bribes in order to facilitate lower valuations.

Under the post-importation inspection scheme, duly authorized customs agents will review the
customs declaration forms submitted by the local importers and verify that the declared prices on
the invoices are indeed correct. This scheme is intended to recover the tremendous loss of
customs revenue as a result of under-invoicing.

Import Licenses
At least 27 categories of products require import licenses prior to importation into Belize. The
list includes products such as rice, beans, eggs, sugar, citrus, flour, meats, jams/jellies, pepper
sauce, matches, peanuts, pasta, soap, toilet paper, beer, aerated beverages, fuel, brooms, and
boats. The Ministry of Industry is expected to submit recommendations to government for the
gradual removal of these quantitative import restrictions. Belizean importers continue to
complain that the process for obtaining import licenses is prone to corruption and needless red

In addition, the Belize Agricultural Health Authority (BAHA), working under the Ministry of
Agriculture, Fisheries, and Cooperatives (MAFC), also has its own requirements for the
importation of agricultural products into Belize. For instance, BAHA requires importers of fresh
plant products to obtain an import permit and to supply phytosanitary certificates and certificates
of origin. Importers of live animals are also required to obtain an import permit from MAFC and
to supply a zoo-sanitary certificate from the country of origin, while importers of pesticides must
also obtain an import permit.

Export Controls
Certain products also require export licenses and/or zoo-sanitary certificates prior to exportation.
The list includes cattle, pigs, fish, crustaceans and mollusk (excluding aquaculture species), logs
and lumber, sugar, honey, citrus fruits, and beans.

Import/Export Documentation
Both importers and exporters must obtain the appropriate permits prior to importing into or
exporting from Belize. Importers are required to submit all original commercial invoices to the
Customs Department. The exportation of animals (including pets) and agricultural products from
Belize require zoo-sanitary and phytosanitary certificates issued by the Belize Agricultural
Health Authority in addition to export permits.

Temporary Entry
The Belize Customs Department allows temporary entry or transit of certain items into Belize.
Products brought in temporarily or in-transit would generally enter duty-free, providing they are
not modified or transformed while in Belize. If, however, the importer later decides to modify or
sell the product locally, all necessary duties must be paid at the Belize Customs Department.

Labeling and Marking Requirements
The Belize Bureau of Standards has a standard for labeling and marking of locally manufactured
and imported products sold in Belize. The three-part standard explains, for example, that the
label affixed to a product shall give a description of a good and shall provide adequate
information to a potential purchaser enabling him to select the goods best suited to his needs.

Prohibited Imports
Certain goods are generally not allowed into Belize unless they originate from another
CARICOM state. The list includes peanut butter, jam, jellies, matches, pasta, beans, rice, wheat
flour, and pepper sauce. Beans and rice, however, like many other locally produced agricultural

products, may not be imported at all whenever there is a surplus of these products on the
domestic market.

The Belize Bureau of Standards promotes and encourages the maintenance and use of codes of
practice, specifications and standards. The bureau often models regulations, such as those for
labeling, after other CARICOM member states. American products that have been made in
accordance with the standards regulations of the U.S. are deemed to comply with Belize’s
standards regulations as well.

Free Trade Zones
The 1990 Export Processing Zone (EPZ) Act of Belize provides for companies to operate within
general or special export processing zones in the country. Special EPZs are enclosed one-factory
operations and general EPZs are enclosed multi-factory operations. Belize’s first EPZ consists
of 28.5 acres and is located eight miles from the Mexican border in the northernmost district of

The Commercial Free Zone Management Authority (CFZMA) has full supervision authority of
the CFZs within Belize. However, the autonomy of the CFZMA board has been eroded as a
result of amendments to the document that provided for the establishment and operation of EPZs
throughout the country to promote commercial trade and investment with neighboring countries.

Membership in Free Trade Agreements
Belize, as a CARICOM member state, has free trade agreements with Venezuela and Columbia.
The country does not have agreements with either the United States or with any European Union
member countries. However, it does have preferential treatment from the United States under
the Caribbean Basin Initiative (CBI) and from the European Union under the Lome Convention.

                              Investment Climate Facts in Brief

   •   The Belize government typically welcomes foreign investment and encourages projects
       that result in increased production, diversification of the economic base, foreign
       exchange earnings and savings, and the transfer of technology and skills.
   •   Special consideration is given to export-oriented businesses established in less-developed
   •   The Belize Trade and Investment Development Service (BELTRAIDE) serves as a one-
       stop shop for information to investors
   •   BELTRAIDE has identified the following sectors of the economy as priority areas of
       investment of interest to U.S. agriculturists:
           Agriculture, agro-industries, food processing and livestock
           Aquaculture and horticulture
           Deep-sea fishing and processing
           Forestry and forestry-based industries
   •   Incentives to promote and encourage investment in Belize (However, many foreign
       investors have complained that these investment promotion tools are rarely as open and
       effective as they are portrayed):

           Fiscal Incentives Act
           Commercial Free Zone Act
           International Business and Public Companies Act
           Export Processing Zone Act
   •   There have been no instances where the government has expropriated or nationalized a
       foreign company. However, there have been several contentious cases where
       government, under its right of eminent domain, appropriated land, which belonged to
       private property owners, including some foreign investors. These expropriations were
       ostensibly made for public purposes, but several were uncovered as political payoffs. The
       government has subsequently strengthened the Ministry of Natural Resources to prevent
       abuses and made a good faith effort to settle claims. Nevertheless, although Belizean law
       requires that the government assess and pay appropriate compensation based on fair
       market value, such compensation can often take years to settle. The Government of
       Belize allocates a very small amount of its annual budget to pay the large and growing
       amount of unpaid property claims.
   •   The Belizean government does not allow 100 percent foreign ownership of an enterprise.
   •   An export permit and either a phytosanitary or zoo-sanitary certificate is required to
       export certain agricultural products, such as fresh fruits, livestock and marine products.
   •   Belize’s financial system is small, but efficient and sound. It consists of five commercial
       banks, one parastatal lending institution (the Development Finance Corporation), and
       several small credit unions.
   •   Historically, Belize has maintained one of the most stable political environments in the
   •   Typical of most countries in the region, Belize has its share of problems with corruption.
       Though bribery is illegal in Belize, laws against it are rarely enforced.
   •   Labor-management relations are relatively good.
   •   Belize has a liberal policy toward capital outflows. According to the Belize Investment
       Guide, the government is committed to guaranteeing repatriation of investment, profits
       and returns from capital gains. However, this policy is dependent upon the availability of
       foreign exchange in the local financial system.

                                       Business Customs

In Belize City, Belmopan, and the district capitals, the normal business attire is an open-collar
business shirt or a guayabera shirt. Business hours for the private sector are normally from 8:00
a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m., Monday through Friday. Government hours
are the same except on Fridays when offices close at 4:30 p.m. Appointments are preferred.
Punctuality is advised and appreciated.

Travel Advisory and Visas
A passport, valid for at least six months past one’s planned stay in Belize, along with a return
ticket are required to enter the country. No visas are required from citizens of the U.S., United
Kingdom and any other Commonwealth country. For such visitors, a visitor's permit of a
maximum of thirty days is given upon arrival at the international airport. Departure taxes and
fees totaling $15 must be paid before leaving from the international airport or $3.75 from either

of the Santa Elena or Benque Viejo borders. It is not possible to access U.S. bank accounts
through automated teller machines (ATMs) in Belize.

More detailed and updated travel information on Belize is available through the U.S. Department
of State in Washington, DC. For recorded information, call 202-647-5225.

U.S. business travelers are encouraged to obtain a copy of the “Key Officers of Foreign Service
Posts: Guide for Business Representatives” available for sale by the Superintendent of
Documents, U.S. Government Printing Office, Washington, D.C. 20402; Tel. (202) 512-1800;
Fax (202) 512-2250.

Business travelers to Belize seeking appointments with U.S. Embassy-Belize officials should
contact the Commercial Section in advance. The Commercial Section can be reached by
telephone at 501-227-7161, fax: 501-227-1468, or email at EmbreyEL2@state.gov.

Business Infrastructure
Foreign business people find it relatively easy to operate in Belize. International transportation
is relatively good with daily direct flights from Miami, Houston, and Dallas/Ft. Worth. Ports in
Belize City and Big Creek handle regularly scheduled shipping from the United States and
United Kingdom.

International telecommunications are excellent and professional services, such as accountants
and attorneys, are readily available. Accommodations range from deluxe hotels in Belize City to
beachfront resorts in the cayes and numerous small lodges and guesthouses available nationwide.
All hotel guests are charged a seven percent tax.

                                    Useful Web Links
Belize Trade and Development Services
Government of Belize Contacts

USDA Foreign Agricultural Service
US Export Programs Guide
Internet Guide to Trade Leads
US Trade Finance Resources
Basic Guide to Exporting

Hemispheric Guide on Customs Procedures
Hemispheric Trade and Tariff Database


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